Wal-Mart Stock Falls on Word of Exec’s Exit

Wal-Mart Inc.’s stock fell sharply Friday after the executive many had expected to take over the top spot at the discounter quit to run video renter Blockbuster Entertainment Inc.

Bill Fields’ departure as the chief of Wal-Mart’s main discount store business took 4% off the company’s stock Friday. News of his appointment as chairman of the Viacom Inc. subsidiary lifted that company’s stock a similar amount.

Wal-Mart’s stock finished down $1 a share at $23 on the New York Stock Exchange. Viacom gained $1.50 to $41 on the American Stock Exchange.

Fields, 47, has been credited with leading Wal-Mart into the video retailing business and making it the world’s biggest seller of videos. He also has broad experience with Wal-Mart, which grew into the nation’s biggest retailer during his 25 years at the company.

Analysts dismissed the stock movement as an overreaction and said Fields’ departure shouldn’t have much effect on Wal-Mart’s outlook, but his sudden departure made many in the market nervous.

“The perception is that if he’s leaving, what does he know about the company that we don’t?” said David Presson, an analyst with Edward Jones Co. in St. Louis. But Presson said it was a better opportunity rather than concerns about Wal-Mart that prompted Fields to leave.

Wal-Mart had its first quarterly profit drop in the most recent period after 99 straight increases.

Blockbuster has been hurt by a surge in video sales by competitors such as Wal-Mart and price wars with new video rental chains. And new technologies threaten to surpass Blockbuster’s video cassette-based business.

Fields’ switch to Blockbuster was a coup for Viacom Chairman Sumner Redstone, who said he wants the video chain to expand internationally to broaden its base. The company is bracing for new competition from satellite-delivered television that beams entertainment into homes.

“He is one of the most impressive and highly regarded executives in retailing, with a proven track record in worldwide markets and strong relationships in the entertainment industry,” Redstone said of Fields.